CHINA is confident it will be able to conclude a free trade area pact with members of the Association of South East Asian Nations by 2010 as originally planned, a senior Chinese official said on Wednesday. China, which has gone out of its way in recent years to convince Southeast Asia its growing economic and diplomatic clout poses no threat, was also willing to step up investment in its southern neighbors, Deputy Commerce Minister Gao Hucheng said. China and ASEAN have been moving to set up the free trade area since 2002, progressively lowering tariffs on a range of goods, and are now discussing liberalizing trade in services. “I believe that with the joint efforts of China and ASEAN member states, we will certainly be able to establish a free trade area on schedule by 2010,” Gao told a news conference. There are several obstacles, not least ASEAN's own stalled efforts to improve economic ties among the group, which comprises Brunei, Cambodia, Indonesia, Malaysia, Laos, Myanmar, the Philippines, Singapore, Thailand and Vietnam. ASEAN has been a free trade area since 1993, but Thailand, for example, refuses to drop import tariffs for Malaysian car makers, accusing its neighbour of protecting them with non-tariff barriers. And ASEAN, along with China and South Korea, has responded tepidly to a Japanese proposal for an East Asia free trade area, a suggestion which Gao made no mention of. But he lauded rising trade as a sign of growing economic integration. Bilateral trade in the year to July alone had risen more than a fifth, though Gao added that China ran a trade deficit approaching $20 billion with the group last year as it sucked in minerals, timber and other resources to feed its economy. China has also been heavily involved in infrastructure projects in ASEAN countries. Gao promised an additional $5 billion in preferential loans to help Chinese companies invest in ASEAN, singling out transport and energy projects. China has funded building power plants and roads in Laos, and ports in the former Burma, all part of a strategy to boost regional cooperation in a part of the world dissected by mountains, jungle and rivers. Chinese investment, along with a flood of Chinese workers and cheap goods, has caused resentment and even violence in some parts of Southeast Asia. Some worry that Beijing is seeking to dominate the region — fears which Chinese officials dismiss. “We have common needs for a common future,” said Chen Zhengrong, deputy director general of the China Council for the Promotion of International Trade's department of international relations.
